The Zane health plan uses a base of accounting known as accrual-basis accounting. With regard to this base of accounting, it can correctly be stated that accrual-basis accounting

Question

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Accrual-basis accounting requires the entity to record revenues when they are earned and expenses when they are incurred, regardless of whether cash has actually changed hands. This provides a more accurate representation of the entity's financial performance and obligations. Option A is partially correct but incomplete, as accrual-basis accounting provides a more comprehensive view of obligations incurred regardless of whether the transaction is completed. Option B is incorrect as accrual-basis accounting is suitable for measuring profitability. Option D is incorrect as adjusting entries are a necessary part of accrual-basis accounting at the end of each accounting period.

The Zane Health Plan Uses a Base of Accounting Known